“With growth forecasts slashed yet again, not just this year but in future years too, it is clear that we cannot go on with the same failing plan from this Government. The Chancellor’s policies aren’t only causing short term pain, but long-term damage to our economy too. And despite the crisis in the eurozone Britain is just one of two G20 countries in a double-dip recession.

“Thank goodness the Olympics will have a positive effect on the next quarter’s growth figures, but this short term effect is not a long-term strategy. We urgently need a change of course on fiscal policy from David Cameron and George Osborne to boost the jobs and growth we need to get the deficit down.”

On the Funding for Lending Scheme, Rachel Reeves added:

“It is worrying that the Bank of England has admitted that its flagship Funding for Lending scheme could see banks simply boosting their profits without lowering lending rates. Why hasn’t the scheme been designed in a way that prevents this?

“The Governor says that he cannot judge the impact of the scheme on lending and growth in the economy, so the Chancellor would be deeply complacent to rely on it to counter the growth-crushing effects of his policies.”